April 30, 2019 / 8:10 PM / 2 months ago

Akamai beats, raises forecast on cybersecurity, content delivery demand

(Reuters) - Akamai Technologies Inc beat analysts’ estimates for first-quarter revenue and profit on Tuesday, and raised its forecast for the full-year, as it sees more demand for its cybersecurity services and traditional business of helping speed up content delivery on the web.

The company is benefiting as more people use their smartphones and computers to download games, videos and software from the internet. The media and carrier division posted a 5 percent rise in revenue in the first three months of 2019.

Chief Executive Officer Tom Leighton told Reuters that he expects the ongoing Indian Premier League (IPL), a professional cricket league, to bolster growth in the second quarter.

“We are seeing good adoption and streaming for cricket in India,” Leighton said.

Akamai forecast current-quarter revenue between $688 million and $702 million, while analysts were expecting $693.3 million.

The company said it now expects full-year revenue in the range of $2.82 billion and $2.86 billion, with adjusted earnings per share between $4.05 and $4.20.

Analysts on average were expecting revenue of $2.84 billion and a profit of $4.10 per share, according to IBES data from Refinitiv.

Shares of the company, which have risen 30 percent this year, rose about 5 percent to $84.05 in extended trading.

Leighton also said the company expects to benefit from a clutch of new over-the-top offerings planned for later this year and early next year.

“We are in a position to be able to deliver the traffic for the streaming providers, and if those offers are successful, that would represent an upside for Akamai,” Leighton said.

Powering the growth in the content delivery business is also a surge in online gaming.

The company in its fourth-quarter earnings call highlighted the boost from the immensely popular battle royale game “Fortnite” and Leighton on Tuesday said Akamai provided services to “a large majority of games” but did not name them.

Revenue from the security business, which helps data centers operate and deliver content securely, jumped 27 percent to $190 million in the first quarter.

Net income rose to $107.1 million, or 65 cents per share, in the three months ended March 31, from $53.71 million, or 31 cents per share, a year earlier.

Revenue rose 5.7 percent to $706.5 million, above estimates of $698.3 million.

Excluding certain items, the company earned $1.10 per share, beating expectations of $1.02.

Reporting by Vibhuti Sharma in Bengaluru; Editing by Sriraj Kalluvila

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